Politicians in Paternalistic Fit over Eduardo Saverin

As best I can tell, the story goes something like this: Eduardo Saverin, co-founder of that Facebook thingie everyone is always talking about, moved to the Republic of Singapore sometime in A.D. 2009. And then in January 2011, Eduardo Saverin filled out and sent in the paperwork for renouncing his U.S. citizenship. And then sometime in September of 2011, Eduardo Saverin’s official request was granted. And now that, in the May of A.D. 2012, the Facebook thing is about to get its initial public offering (IPO) of stock, which could make for Mr. Saverin several truckloads of dollars, some people have decided to throw a hissy fit.

“This guy just thinks he can rip us off by engaging in this scheme,” [Senator Bob] Casey, D-Pa., said at a Capitol Hill news conference this morning. “We’ve got troops overseas that are sacrificing on our behalf every day, all the values that we hold dear. And Mr. Saverin spits in their eye, he spits in the eye of the American people. It’s an insult. He should be held accountable.”

Saverin, 30, relinquished his U.S. citizenship in September 2011 before the company announced its planned initial public offering of stock, which will debut this week. The move was likely a financial one because he owns an estimated 4 percent of Facebook and stands to make $4 billion when the company goes public.

“Saverin has turned his back on the country that welcomed him and kept him safe, educated him and helped him become a billionaire,” [Senator Chuck] Schumer, D-N.Y., said. “This is a great American success story gone horribly wrong.”

[…]

But Schumer was unrelenting this morning. “It just so happens the country where he has chosen to reside, Singapore, has no capital gains tax,” Schumer added. “This tax-avoidance scheme is outrageous. Eduardo Saverin wants to ‘defriend’ the United States of America just to avoid taxes we aren’t going to let him get away with it.”

So to stop Saverin, and others who have relinquished their citizenship for tax avoidance, Sens. Schumer and Bob Casey, D-Pa., unveiled the “Ex-PATRIOT” – “Expatriation Prevention by Abolishing Tax-Related Incentives for Offshore Tenancy” – Act today.

The act is intended to respond directly to Saverin’s move, which they call a “scheme” that would “help him duck up to $67 million in taxes.”

The plan would re-impose taxes on expatriates like Saverin even after they flee the United States and take up residence in a foreign country.

If the Internal Revenue Service determines that people renounce their citizenship to avoid taxes, according to the proposal, they would then be subject to a 30 percent capital gains tax on future investment gains in the United States, regardless of where they live.

But most notably, the plan would bar individuals like Saverin from ever re-entering the United States again.

I was unaware that Senators Schumer and Casey were six years old. Which is my sarcastic way of saying they are being childish.

Which is odd, because while they are whining like little children they are also being paternalistic. They are almost acting like abusive parents. They complain that Mr. Saverin spits in the eye of the U.S. troops, and “he spits in the eye of the American people” and he “has turned his back on the country that welcomed him and kept him safe, educated him and helped him become a billionaire.” Whine, whine, whine. And indignantly they proclaim they “aren’t going to let him get away with it.” How? By punishing him with more taxes than he will already be paying (yes, expatriates still get taxed by the U.S. government) and by barring him from ever returning to the United States.

“You wanna leave?” I can almost hear them shouting. “You wanna leave? We’ll show you what we do to ungrateful brats!”

Senators Schumer and Casey are trying to control people. They are reacting like angry, abusive parents in public because they think they can get away with it. And they probably will, sadly. I am sure the “punish Eduardo Saverin” bandwagon is already loading up.

Mr. Saverin has not done anything wrong. He should not be punished so that a couple of Senators can score political points. If anyone should be punished in this, it is the senators. They are acting like a couple of immature and abusive parents and should be reprimanded for their bad public behavior.

(And yes, I used “A.D.” And yes, the “A.D.” goes before the year number. Not after.)